United States v. Gibson

Joseph
H. Thompson, UNITED STATES ATTORNEY'S OFFICE; and Ryan R.
Raybould, UNITED STATES DEPARTMENT OF JUSTICE, for plaintiff.

Jordan
S. Kushner, for defendant.

ORDER

Patrick J. Schiltz United States District Judge

After a
five-day trial, a jury convicted defendant Donald Gibson of
five counts of tax evasion and one count of passing a
fictitious instrument. ECF Nos. 32, 71, 77. Gibson moved for
acquittal under Federal Rule of Criminal Procedure 29-both
orally (at the end of the government's case) and in
writing (after the trial). ECF No. 80. The Court denied
Gibson's motion insofar as it applied to Counts One,
Three, Four, Five, and Six of the superseding indictment,
which charged him with tax evasion. ECF No. 76. But the Court
asked for further briefing regarding Gibson's motion
insofar as it applied to Count Two, which charged him with
passing a fictitious instrument. Having reviewed that
briefing, the Court now denies Gibson's motion for
acquittal on Count Two.

In
ruling on a motion for acquittal, the Court must view the
evidence in the light most favorable to the government,
resolve any evidentiary conflicts in the government's
favor, and accept any “reasonable inferences that may
be drawn in favor of the verdict.” United States v.
Jenkins, 758 F.3d 1046, 1049 (8th Cir. 2014). The Court
cannot overturn the verdict for insufficient evidence unless
no reasonable jury could have convicted the defendant on the
basis of the government's evidence. Id.

Gibson's
conviction for passing a fictitious instrument related to two
bonds that Gibson mailed to the IRS in 2012, after the IRS
informed Gibson that he owed more than $330, 000 in back
taxes. (Gibson had stopped filing tax returns and paying
income taxes in 2004, which was the basis of his convictions
for tax evasion.) Instead of paying his tax bill with cash, a
check, a money order, or a credit card, Gibson sent two
documents to the IRS: (1) a “Private Offset Discharging
and Indemnity Bond” and (2) a “Private Offset
Bond.” In these “bonds, ” Gibson purported
to authorize the IRS to pay his back taxes by withdrawing
funds from a secret account containing millions of dollars
that the United States Treasury supposedly held on his
behalf. For this conduct, the jury convicted Gibson of
violating 18 U.S.C. § 514(a), which penalizes anyone
who, “with the intent to defraud . . . passes, utters,
presents, offers, brokers, [or] issues . . . any false or
fictitious instrument, document, or other item appearing,
representing, purporting, or contriving through scheme or
artifice, to be an actual security or other financial
instrument issued under the authority of the United
States.”

Gibson
argues that his conviction under § 514(a) is not
supported by sufficient evidence for two reasons:

First,
Gibson argues that the bonds that he sent to the IRS did not
appear, represent, or purport to be “issued under the
authority of the United States.” See ECF No.
80 at 1-2. Those bonds were labeled as “private”
bonds, not government bonds. See Gov't Exs.
143A, 143C. They were issued “to the order
of”-not “by”-the Secretary of the Treasury.
Id. And they did not bear any official seal,
signature, or statement explicitly indicating that they were
“issued under the authority of the United
States.” See id.

Unfortunately
for Gibson, however, a bond need not purport to be issued by
a government agency to support a conviction under §
514(a). Rather, it is sufficient for the bond to claim to
draw from some sort of account maintained by the
United States government. For example, in United States
v. Getzschman, 81 F.App'x 619 (8th Cir. 2003)
(unpublished opinion), the Eighth Circuit concluded that a
fictitious instrument that claimed to draw from a nonexistent
“Treasury Direct Account”“clearly f[e]ll
within the meaning of § 514(a).” Id. at
620, 622. Similarly, in United States v. Murphy, 824
F.3d 1197 (9th Cir. 2016), the Ninth Circuit held that the
evidence was sufficient to support the jury's finding
that four “bonded promissory notes” “were
issued under the authority of the United States.”
Id. at 1200, 1204. Each note was made payable
“to the order” of the Secretary of the Treasury.
Id. at 1200. Each of those notes was purportedly
secured by a “private discharging and indemnity
bond” and “private offset bond.”
Id. And documents accompanying the notes appeared to
authorize the government to “pay [the defendant's]
taxes from an account created for him, and held on his
behalf, by the United States government.” Id.
at 1204.

Gibson's
conduct is not materially distinguishable from the conduct of
the defendants in Getzschman and Murphy.
The bonds issued by Gibson were also labeled as
“private offset” and “private discharging
and indemnity” bonds. Gov't Exs. 143A, 143C. Those
bonds were also made payable “to”-or “to
the order of”-the Secretary of the Treasury.
Id. And those bonds also purported to draw from some
sort of Treasury account, with one of the bonds explicitly
identifying several government entities as co-holders of the
account being accessed. Id. Here, then, as in
Getzschman and Murphy, the government's
evidence was sufficient to allow a reasonable jury to
conclude that the bonds appeared, represented, or purported
to be “issued under the authority of the United
States.”

Second,
Gibson argues that his bonds did not appear, represent, or
purport to be “actual . . . financial
instruments.” See ECF No. 80 at 2-4. He notes
that the bonds lacked many of the “hallmarks” of
genuine government bonds, such as “presidential
portraits” or “official seals.”
Id. at 3. He also notes that the government was able
to quickly determine that these bonds were fake. Id.
at 3-4.

Section
514(a), however, does not require a fake instrument to
“appear similar to an existing financial instrument,
” as long as the fake instrument “credibly
hold[s] itself out as a negotiable instrument.”
United States v. Howick, 263 F.3d 1056, 1067-68 (9th
Cir. 2001). In other words, § 514(a) “criminalizes
even bogus obligations that a prudent person might . . .
[reject], so long as those documents bear a family
resemblance to actual financial obligations.”
Murphy, 824 F.3d at 1204 n.1 (quoting
Howick). For example, in Getzschman, the
defendants claimed to own millions of dollars in
“Treasury Direct Accounts”-accounts that do not
actually exist. Getzschman, 81 F.App'x at 620.
The defendants then proceeded to “create money orders
and sight drafts drawn on their Treasury Direct Accounts to
pay for goods and services.” Id. After the
defendants were convicted of violating § 514(a), they
questioned whether the “fictitious treasury direct
money orders and sight drafts they used” could
“purport to be actual . . . financial
instruments.” Id. at 621. The Eighth Circuit
responded by noting that § 514(a) is not limited to
“actual” financial instruments; instead, it
“covers wholly nonexistent types of financial
instruments.” Id. at 622 (citing United
States v. Pullman, 187 F.3d 816, 823 (8th Cir. 1999)).

It is
true that, unlike the fake instruments in Howick,
Gibson's fake bonds did not contain any
“presidential portraits, ” “official seals,
” or “statements [claiming] that the notes were
‘legal tender for all debts public and
private.'” Howick, 263 F.3d at 1069. But
the bonds nevertheless “b[ore] a family resemblance to
actual financial obligations.” Id. at 1068.
They were printed on heavy stock paper. They had elaborate
borders, ink signatures and thumbprints, issuance and
expiration dates, and repeated references to real government
officials and agencies. See Gov't Exs. 143A,
143C. Moreover, one of the bonds stated that “[a]ll
such liabilities, duties, obligations, and debts shall be
ledgered against this Bond . . . and shall pay, satisfy,
offset, and discharge, Dollar for Dollar, all such
obligations fully and completely.” Gov't Ex. 143A
at 4. Taken as a whole, the government's evidence was
sufficient to allow a reasonable jury to find that these
bonds appeared, represented, or purported to be “actual
. . . financial instrument[s], ” as § 514(a)
requires.

For
these reasons, the Court denies Gibson's motion for
acquittal on Count ...

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